H.N. Nagaraju vs S. Shankara and Others

N. Kumar, J.—This is a plaintiffs regular first appeal challenging the judgment and decree of the Trial Court, which has declined to grant the decree for specific performance and granted the alternative relief for refund of the advance amount of Rs. 10,00,000/- paid under the agreement of sale with interest at 6% p.a. from the date of the agreement till the date of realization.

For the purpose of convenience the parties are referred to as they are referred to in the original suit.

The subject matter of the suit is agricultural land bearing Sy. No. 9/1 and 9/2 measuring 1 acre 26 guntas assessed at Rs. 4.28 and 31 guntas assessed at Rs. 2.03 totally 2 acre 17 guntas situated in B. Agrahara Village, Belagola Hobli, Srirangapatna Taluk, which is more fully described in the schedule to the plaint and hereinafter referred to as the ''schedule property''.

The case of the plaintiff is that defendant No. 2 is the wife and defendant Nos. 3 and 4 are the daughter and son of defendant No. 1. They are the owners of the schedule property. They wanted to sell the schedule property for their necessity. They approached the plaintiff to sell the suit schedule land measuring 2 acres 17 guntas for Rs. 26,75,000/- per acre, in all amounting to a sum of Rs. 64,86,875/-. Plaintiff believed the representation of the defendants and agreed to purchase the same. The defendants have executed a sale agreement on 15.3.2006 agreeing to sell the schedule property to the plaintiff for a sum of Rs. 64,86,875/-. A sum of Rs. 10,00,000/- was paid by the plaintiff to the defendants as advance towards part payment of sale consideration and the said amount is acknowledged, in the presence of the witnesses. The period stipulated for completing the sale transaction was three months from the date of agreement. After entering into the agreement of sale, unfortunately defendant No. 1 did not make any attempt to get the land surveyed as agreed upon. The plaintiff approached the defendant on several times and made requests to get the land measured and to finalize agreement of sale, so as to get the sale deed executed and registered at the cost of the plaintiff. But such request of the plaintiff became in vain. As per the terms of the agreement defendant agreed to receive the balance of sale consideration of Rs. 54,86,875/- at the time of registration of the sale deed before the Sub-Registrar. The plaintiff agreed to meet the expenses of drafting the sale deed on the required value of the stamp paper and also meet the expenses of registration. The plaintiff himself got measured the suit land and as per the measurement it reveals that 2 guntas of land out of 2 acres 17 guntas of land has been acquired by the Government for widening the road. The plaintiff approached the defendant on several times with the balance of sale consideration of Rs. 54,86,875/- along with the necessary money required for expenses and requested defendant No. 1 to come over to Sub-Registrar''s Office to get the sale deed registered, but defendant No. 1 on one or the other pretext had postponed the execution of the sale deed. Thereafter to the surprise of the plaintiff the defendants got issued a legal notice dated 5.5.2006 to the plaintiff making allegations which are contrary to the covenants of agreement of sale. The plaintiff got issued a suitable reply through his advocate on 11.5.2006 denying the allegations made in the notice of the defendants. The defendants also issued rejoinder to the notice issued on 11.5.2006, through notice dated 31.05.2006. In the reply notice dated 11.5.2006 issued by the plaintiff it is specifically mentioned that the plaintiff is ready and willing to perform his part of the contract and to fix a date when the defendants are free to come over to Sub Registrar''s Office to execute the sale deed in favour of the plaintiff. The plaintiff once again issued a legal notice to the defendants on 16.2.2009. The said notice was duly served on the defendants on 17.2.2009. The defendants have caused untenable reply dated 20.02.2009. Further the plaintiff has pleaded that after the institution of the suit by the plaintiff, the defendants also got filed a suit in the names of Laxmamma, Puttathayamma, Radhamma and Padmamma in O.S. No. 63/2010 on the file of the Principal Civil Judge, (Sr.Dn.) and JMFC at Srirangapatna Court, for partition and separate possession against the defendants in respect of the suit schedule property behind the back of the plaintiff and obtained a decree for partition in respect of the plaint schedule property and other two properties without including the valuable house property situated in Srirangapatna Town and other property belonging to the 1st defendant and his brothers without contest, without disclosing the suit filed by the plaintiff for decree of specific performance of the contract. Thus the impugned judgment and decree. passed is a collusive one, it does not bind the plaintiff to any extent and it does not affect the plaintiffs right to get a decree for specific performance of the contract. Therefore, the plaintiff has filed a suit for specific performance of the agreement of sale. The original suit was filed only against defendant Nos. 1 to 4. After written statement was filed by the defendants, defendant Nos. 5-10 were impleaded.

After service of summons the defendants 1 to 4 appeared through their counsel and filed detailed written statement. They contended that agreement dated 15.3.2006 between the plaintiff and defendants are not mutual one. Valuation is made only to the land and no valuation is made to the house and 40 coconut trees, payment of Rs. 10,00,000/- was admitted. When the plaintiff with the assistance of the police tried to get the benefit against the real facts, the defendants got a notice issued stating that the plaintiff is not a bona fide purchaser, he has entered into an agreement only by paying a small amount to them. His intention is to sell the land to others on higher value by taking the assistance of Revenue Department, Survey Department and Police Department, otherwise, he would not wait till the end of the agreement period. He had approached the defendants through one Jagadeesha of Ballenahalli and asked Rs. 20,00,000/- for canceling the agreement, but defendant No. 1 did not agree. In the suit property there is a R.C.C. House and 40 coconut trees. The defendants 1 to 4 are not the exclusive owners of the suit property as such they have no right to sell the suit schedule property. Even if the agreement of sale is proved plaintiff is not entitled for specific performance. The suit is not in time. Therefore, they prayed for dismissal of the suit. Defendant No. 4 was a minor, after he attained majority a written statement was filed contending that the suit property is ancestral and joint family properties and are in joint possession of the defendants. Hence the agreement executed by defendant No. 1 is not in accordance with law, it is void. There was no necessity for the family to alienate the property and the sale agreement was not in time. The Court has already decreed the suit in O.S. No. 63/2010 as the suit schedule properties are the joint family properties of defendants and and in fact a final decree was passed on 17.11.2011 in FDP No. 4/2012. Therefore, the plaintiff is not entitled to the relief sought for.

Defendant Nos. 5 to 8 filed a separate written statement contending that the suit properties are all Hindu Joint Family properties of defendant Nos. 1, 9 and 10 and they are all in joint possession. As they have filed O.S. No. 63/2010 a final decree passed in the said suit. These defendants are not parties to the said agreement. Therefore, the plaintiff is not entitled to any relief against them and the said agreement is also not binding on the respondents was denied. A separate statement was filed virtually reiterating the allegations made by the other defendants.

On the aforesaid pleadings the Trial Court framed the following issues.

"a. Whether the plaintiff proves that the defendants are the exclusive owners of the suit schedule property?

(At the time of framing this issue my learned predecessor mentioned as defendants instead of defendant No. 1 to 4. Hence for the purpose of disposal I have taken defendant No. 1 to 4 in this issue.)

b. Whether the plaintiff proves that the defendant Nos. 1 to 4 have executed sale agreement in favour of the plaintiffs agreeing to sell the suit schedule property for a sum of Rs. 64,86,875/- on 15.3.2006?

c. Whether the plaintiff proves that the defendants have received a sum of Rs. 10,00,000/- as advance in pursuance of the sale agreement dated 15.3.2006 and agreed to receive the balance sale consideration of Rs. 54,86,875/- at the time of execution of the sale deed?

d. Whether the defendants No. 1 to 4 prove that the suit as brought by the plaintiff is not maintainable?

e. Whether the plaintiff proves that he was ready and willing to perform his part of contract?

f. Whether the plaintiff is entitled for reliefs of declaration as sought for in the prayer column of the plaint?

(At the time of framing this issue my learned predecessor has framed this issue as plaintiff is entitled for the relief of declaration as sought for instead of relief of specific performance of contract. So, for the disposal of the case, I have taken this issue as whether plaintiff is entitled for the relief of specific performance of contract as sought for)

g. What decree or orders? "

The plaintiff - H.N. Nagaraju in order to substantiate his claim examined himself as PW. 1. He also examined the witness Ramachandra as PW.2 and produced 19 documents which were marked as Exs. P1 to P19. On behalf of the defendants, defendant No. 1 - S. Shankar was examined as DW. 1 and the 5th defendant - Lakshmamma was examined as DW. 2 and they have also produced 10 documents which were marked as Exs. D1 to D10.

The learned Trial Judge on consideration of the aforesaid oral and documentary evidence on record, recorded a categorical finding that defendant No. 1 for himself and on behalf of minor children defendant Nos. 3 and 4 and defendant No. 2 have executed the sale agreement on 15.3.2006 in favour of the plaintiff for a sum of Rs. 64,86,875/- by receiving a sum of Rs. 10,00,000/- as advance and they agreed to execute the sale deed by receiving the balance sale consideration. Further it recorded a finding on additional Issue No. 1 that the said agreement of sale is not binding on defendant No. 4 as he is a minor as on the date of agreement of sale, it is not stated that the said agreement is executed in the interest of minor. It held the suit is not bad for misjoinder of parties as contended by defendant Nos. 5 and 10 answering additional issue No. 2. It has also negatived the contention of defendant Nos. 1 to 4 that the suit of the plaintiff is not maintainable. Dealing with the issue of readiness and willingness to perform his part of the contract, it has recorded a categorical finding that the material on record did not establish that the plaintiff was ready and willing to perform his part of the contract. In the result, the Trial Court held the plaintiff is not entitled to specific performance, but is entitled to get back Rs. 10,00,000/- paid, with interest at 6% p.a. from the date of agreement till the date of realization and thus the suit was partly decreed. Aggrieved by the said judgment and decree of the Trial Court, the plaintiff is in appeal.

The learned counsel for the appellant assailing the impugned judgment and decree contended that the suit is filed subsequent to the filing of the O.S. No. 63/2010, it is a collusive one. On the basis of the said decree the Trial Court could not have denied the relief of specific performance to the plaintiff. Consequently he contended the plaintiff was always ready and willing to perform his part of the contract. The evidence on record clearly established this fact and the finding recorded on this aspect is erroneous and therefore, contends that the judgment and decree of the Trial Court requires to be set aside and decree for specific performance is to be passed.

On the contrary, the learned counsel for the respondents supported the impugned judgment and decree

In the light of the aforesaid facts and the rival contentions the points that arise for our consideration are as follows:--

a. Whether the finding of the Trial Court that the plaintiff was not ready and willing to perform his part of the contract and therefore, is not entitled to such decree for specific performance is erroneous as contended by the learned counsel for the appellant.

b. Whether the trial Court could have denied the specific performance on the basis of a collusive suit filed and decree obtained subsequent to the filing of the suit.

Point No. 1

From the material on record, it is clear that defendant No. 1 on his behalf and on behalf of minor children and defendant No. 2 executed agreement of sale on 15.3.2006 agreeing to sell the suit schedule property at rate of Rs. 26,75,000/- per acre, which works out to Rs. 64,86,875/-. The execution of the agreement is not in dispute. On the date of the agreement Rs. 10,00,000/- was paid as advance it is also not in dispute. Time stipulated for completion of the sale transaction is three months from the date of the agreement. The terms of the agreement Ex. P1 makes it clear on the date of the agreement itself the defendants handed over Xerox copies of all the documents of title to the plaintiff. Similarly even the sketch of the schedule land issued by the Survey Department which is required for the registration of sale deed is also handed over which is required at the time of registration. It is stipulated that if there is any difference between the extent as reflected in the documents and the survey records to be prepared after conducting the survey they are agreeable to receive the consideration as per the measurement even in the surveyor''s sketch. Three months period from the date of agreement expires on 15.06.2006. In order to find out whether the plaintiff was ready and willing to perform his part of the contract, and it is necessary for us to go into the details what he did before 15.6.2006. The plaintiff did not issue any notice either before 15.6.2006 or immediately thereafter. On the contrary, the defendants got issued the legal notice dated 5.5.2006 as per Ex. P.5. It is stated in the said legal notice the R.C.C. house and 40 coconut trees were not included in the agreement in order to save stamp duty. At the time of execution of execution of the sale deed they had promised to include the same, but the plaintiff is contending that he was not knowing how many coconut trees and house were there and paid only for Rs. 10,00,000/- as advance, which is permissible in law. Therefore, they called upon the plaintiff to pay the balance sale consideration within a week from the date of reply of notice and take the sale deed after paying the balance sale consideration for the house as well as the coconut trees. It was made clear that if such request is not complied with, the sale agreement would be cancelled and the advance amount would be forfeited.

The plaintiff in the plaint admits that he received the said legal notice and he has sent a reply through his counsel on 11.05.2006 which is not forthcoming. However, the defendants sent one more notice dated 31.5.2006 before the expiry of three months as per Ex. P.6 reiterating what they had stated in the earlier legal notice and also referring to the reply issued by the plaintiff on 11.5.2006 had taken exception to the complaint lodged with the jurisdictional police and threatened him to execute the sale deed. Therefore, when there is no recital in the agreement of sale in respect of R.C.C. Building and 40 coconut trees, there was no consensus ad idem. Such agreement is void and accordingly cancelled the agreement. The plaintiff has referred to this second legal notice also, there seems to be no reply to the same. From the above, it is clear that before the due date on 15.6.2006 the defendants had not only called upon the plaintiff to perform his part of the contract by paying the balance sale consideration. For his failure they had cancelled the agreement of sale. It is curious to know, when the agreement was cancelled on 31.5.2006 the plaintiff has not moved his little finger to enforce the contract. It is only nearly after two years and 10 months i.e., on 16.2.2009 he caused the legal notice issued as per Ex. P7 calling upon the defendants to perform their part of the contract and indicating that he is ready and willing to perform his part of the contract. On receipt of the legal notice defendants have sent their reply dated 22.02.2009 denying all the allegations and cancelled the agreement made on 15.03.2006. The plaintiff, who has entered the witness box to substantiate his claim, particularly, regarding his readiness and willingness to perform his part of the contract, as specifically it is denied in the written statement has not produced any evidence to show his bonafides to pay the balance sale consideration and the attempt made by him to pay the sale consideration. The documents which are produced are only the agreement of sale as per Ex. P1, Ex. P2 and P3 are the RTC extracts, Ex. P4 is the sketch, Exs. P5 and P6 are the notices issued by the defendants. Ex. P7 is the notice issued by the plaintiff. Ex. P8 is the reply notice issued by the defendant. Exs. P9 to 11 are the acknowledgements and Ex. P. 12 is the copy of the Judgment and decree in O.S. No. 63/2010. Ex. P13 is the copy of plaint in O.S. No. 63/2010, Exs. P14 and 15 are the Demand extract, Ex. P16 is the encumbrance certificate, Ex. P17 is the RTC extract, Exs. P18 and 19 are the copies of the sale deeds. Thus no documentary evidence is adduced to prove that the plaintiff was ready with the balance sale consideration before the date agreed for completing the sale transaction and subsequently till the date of the suit and on the day he was adducing evidence. It is apparent on the face of the record the Trial Court has rightly held that the plaintiff failed to prove his readiness and willingness to perform his part of the contract. The said finding of the Trial Court is based on legal evidence. Unless the plaintiff pleads and proves his readiness and willingness to perform his part of the contract, the Court gets no jurisdiction to decree a suit for specific performance and therefore, the finding recorded by the Trial Court is flawless and in accordance with law and does not call for any interference.

Point No. 2:

Though the said suit is filed i.e., O.S. No. 63/2010 subsequent to the filing of the suit by the plaintiff and a consent decree is passed, though on the face of it, it is collusive one, the fact that that the daughters have a right in the said property as it is a joint family property cannot be denied. As we have already recorded a finding that the plaintiff was not ready and willing to perform his part of the contract, the impugned judgment and decree stands and the legal issues need not be gone into, as it would be unnecessary.

We do not see any merit in this appeal, it is accordingly dismissed.